Merger forms fifth largest bank holding in Alabama
Published 12:00 am Thursday, May 24, 2007
Local customers should expect no significant changes as The Peoples Bank and Trust Co., a 25-year fixture here as a branch of The Peoples BancTrust Company Inc. of Selma, and an even longer prominent member of the local financial community, becomes part of the BancTrust Financial Group Inc., based in Mobile.
“We've heard nothing but glowing reports about BancTrust, its employees, its corporate culture and its commitment to communities where it is located,” Jim Dunklin, division president of Peoples in Butler and Dallas counties, said Tuesday. “We look forward to becoming part of that organization.”
When competed, the merger will form the fifth largest bank holding company headquartered in Alabama with almost $2.4 billion in assets and $2 billion in deposits, operating 54 branches in Alabama and Florida.
The transaction is expected to close before the end of this calendar year.
“What is interesting,” Dunklin, who has been head of Butler County's four branches for 3-and-a-half years,” continued, “ is that when you look at the markets served by both institutions, the merger seems a perfect fit.”
Though Peoples has 23 offices in 10 Alabama counties (Butler, Autauga, Bibb, Dallas, Elmore, Jefferson, Lee, Montgomery, Shelby and Tuscaloosa) and BancTrust has 21 offices in 8 counties (Autauga, Baldwin, Barbour, Escambia, Marengo, Mobile, Monroe and Montgomery), only one community - Prattville - has branches of both offices.
“That's both unusual and positive,” Dunkin said. “It provides room for real expansion.”
Peoples brings $900 million in assets to the merger. BancTrust has $1.3 billion, creating the $2.4 billion base.
“On the economy of scale,” Dunklin said, “you get the expanded product lines and services offered by a larger bank along with the continuation of the services of a community bank. That's the best of both worlds.”
BancTrust also has 10 offices in northwest Florida.
W. Bibb Lamar Jr., president and chief executive officer of BancTrust Financial Group Inc. and, ironically, a native of Selma, will serve as president and chief executive officer of the combined company.
“We expect this merger to create a positive impact from a financial perspective very soon after it closes,” he said. “We see clear opportunities for cost savings and earnings improvement that we expect to make this merger accretive to earnings per share in the first year following the consolidation of our subsidiary banks.
“Both companies employ similar or complementary core computing systems and combining them should enable us to achieve significant operating efficiencies. We plan to consolidate our subsidiary banks as soon as practicable in 2008.
“The combination of our companies will afford our customers broader product and branch locations in a footprint which spans central and southwest Alabama and northwest Florida,” Lamar said. “We will continue to provide high quality personal service and local decision-making as each of our banks has historically done.”
The two companies, combined, employ 700 people, 26 in Butler County at the Greenville Main, Greenville Bypass, Georgiana and McKenzie offices.
While no changes are anticipated here, bank mergers typically impact corporate staff positions, suggesting Selma slots could be affected. Also unknown is the impact on citizen advisory boards.
“Butler County will mean something to BancTrust,” Dunklin said. “We're large enough to have an impact as an addition. We think BancTrust will like it here and will enjoy expanding its base in our area.”
The transaction is subject to a number of conditions. Shareholders of both banks must approve, as must the appropriate regulatory agencies. The boards of directors have both unanimously approved the transaction and all individual directors of both institutions have also executed agreements that favor its enactment.
A group of Peoples shareholders, called “Stockholders for Progress” and headed by former CEO Richard Morthland, supports the merger.
BancTrust must also obtain suitable financing to fund the cash portion of the transaction.
Under terms of the agreement, Peoples shareholders will receive aggregate consideration of $25.50 per share of Peoples common stock, to consist of a combination of $6.375 in cash and BancTrust common stock.
Peoples Bank was formerly Greenville Bank until its purchase in 1982.